Penny Stocks

[ActionTodd]

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Has a penny stock ever hit into the dollars? Sorry for a lame question, but I know nothing about penny stocks.

[/ QUOTE ]Of course they have but is a rare creature.

[ActionTodd]

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If a company has a 1000000 shares at $1 each, then how is it fundamentally different than if it had 10000 shares at $100 each (liquidity issues aside)?


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I'd rather in the $100/SH club than the $1/SH club [img]/images/graemlins/laugh.gif[/img]

[nastynatedub]

how does one find essential investing liturature on micro cap companies? ..i.e financial statements, balance sheets, cash flow etc.
how can someone be sure that a micro cap company is a good or bad investment?
are all micro cap companies impossible to research and evaluate?
does anyone have any good research techniques focused upon small cap and micro cap companies?

[DesertCat]

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what about peter leeds?, self proclaimed penny stock genius,
is this guy legit? is his book worth reading? do his methods work?

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Doubtful.

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please explain...

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Most research for sale is useless, if it were truly valuable they'd keep it proprietary. Those who can, invest and beat the market, those who cant sell research or newsletters. And i was briefly a partner in a research firm Also an untrustworthy research firm can front run trades and dump losers on clients. Lastly I invest successfully in this space without using momentum or TA, the fact that he is using them makes me think he's selling sizzle, not steak.

[uclaben]

Ignorance alert: I have little to no knowledge of the markets.

If buying penny stocks is generally an awful idea, would shorting them not generally be a good idea?

[ActionTodd]

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Ignorance alert: I have little to no knowledge of the markets.

If buying penny stocks is generally an awful idea, would shorting them not generally be a good idea?

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I thought you can't short a penny stock

[DesertCat]

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Ignorance alert: I have little to no knowledge of the markets.

If buying penny stocks is generally an awful idea, would shorting them not generally be a good idea?

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I thought you can't short a penny stock

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It's possible. My broker won't do it, but you could probably find a broker who would. But they have to find shares to borrow so you can short them, and that could be almost impossible with most penny stocks.

But even if you could shorting penny stocks is very foolish. If you short a piece of junk trading at 10 cents and one day it shoots up to 75 cents because of a spam pump n dump scheme, you are now down over six times your investment. And if you shorted a good amount of shares your broker will quickly start liquidating your account to pay that debt.

[uclaben]

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Ignorance alert: I have little to no knowledge of the markets.

If buying penny stocks is generally an awful idea, would shorting them not generally be a good idea?

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I thought you can't short a penny stock

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It's possible. My broker won't do it, but you could probably find a broker who would. But they have to find shares to borrow so you can short them, and that could be almost impossible with most penny stocks.

But even if you could shorting penny stocks is very foolish. If you short a piece of junk trading at 10 cents and one day it shoots up to 75 cents because of a spam pump n dump scheme, you are now down over six times your investment. And if you shorted a good amount of shares your broker will quickly start liquidating your account to pay that debt.

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Isn't this exactly the same logic people use to support purchasing penny stocks? Are you saying it's foolish, or high-variance/risky?

I'm not sure how it can be foolish both to buy and sell the same entity (save for transaction costs).